Sign in toNOLA.com

S&WB contemplates a $723.4 million building budget for 2014

Updated December 6, 2013 at 6:12 AM;Posted December 5, 2013 at 7:53 PM

s&wb_water_meter_cover.jpg

The staff of the New Orleans Sewerage & Water Board is recommending a $157.6 million operating budget and a $723.4 million capital improvement plan for 2014.
(Eliot Kamenitz, NOLA.com | The Times-Picayune archive)

The New Orleans Sewerage & Water Board unveiled its plans Thursday evening to spend $157.6 million on operations and a whopping $723.4 million on repairs and improvements to its crumbling infrastructure next year as the first of eight years of water and sewer rate increases comes to a close.

Deputy Executive Director Bob Miller tried to assure the small assembly at the Port of New Orleans that the money is there: The water board's aspirations are fully financed through a combination of federal aid, revenues and borrowed cash, he said.

"The dominoes have fallen the way we predicted they would," Miller said.

Miller described the next year as a turning point of sorts as the S&WB tries to transition from a stricken agency that loses almost 90 million gallons of drinking water every day and is under orders from the Environmental Protection Agency to stop sewage from leaking into the soil and waterways, to one with a storm-hardened network of pipes, canals, pump stations, power plants and treatment plants.

Should things go as predicted, the water board could hire 38 more employees in 2014, bringing its ranks up to 1,058. It had fewer than 1,000 workers shortly after Hurricane Katrina, and about a third of the existing workforce is old enough to retire.

The S&WB's dire financial straits after Katrina have calmed somewhat -- partly a result, Miller said, of the first of eight 10 percent rate increases for water and sewer services that the New Orleans City Council enacted at the start of 2013.

The operating budget represents a 5 percent increase over this year's spending, a bump that Executive Director Marcia St. Martin attributed mostly to pending needs for more staff training.

But to pull off major improvements in the city's drainage system, the board must enact a new service fee sometime soon, Miller said.

S&WB officials said they had no details yet about that pending charge. It's uncertain who would pay it or how much the fee would be, they said. But Miller acknowledged it could be toward the higher end of drainage costs in comparable metropolitan areas.

The full board is expected to consider the 2014 budget, which must be approved by the end of the year, at its Dec. 18 meeting.

In his presentation, Miller said the board plans to start issuing bonds again next year, which he couched as an encouraging sign. The S&WB expects to pay for much of the estimated $3.3 billion in long-term repairs by leveraging the $585 million that the rate increases could generate through 2020.

Much of the capital budget next year is covered by FEMA, which has agreed to reimburse the S&WB $53.2 million for repairs to the water system: $27.4 million on sewer repairs and another $24.6 million on drainage. Another $203 million in hazard mitigation money would be spent on infrastructure projects, according to the budget proposal. Plans could lead to two new water towers erected at the board's campus along South Claiborne Avenue, which would help pressurize the water pipes around the city, Deputy Superintendent Madeline Goddard said.

Included in the 2014 budget are plans to spend $226 million on "power projects," including the power plant at the S&WB's Carrollton property and generators at various pump stations. That plant, which produces uncommon electricity called 25-cycle that runs its older drainage pump stations, took in several feet of water as the city flooded after the levees failed in August 2005, after Katrina.